As Indiana Congressional Session Ends, Our Eyes Turn towards Washington D.C.
Now that our state lawmakers have returned home and will not return until January 2018, our eyes turn to Washington, D.C. where members of the Indiana congressional delegation will help decide the fate of a number of consumer protections.
What will happen to the Consumer Financial Protection Bureau’s prepaid card rule? These days, more than 12 million households use prepaid cards to conduct financial transactions and a number of employers use the cards to pay their employees in lieu of direct deposit or paper checks. The rule would make a number of protections available to users of prepaid cards, including transparency about fees, notice from employers that they can opt out of paychecks via prepaid card, quick and easy access to card balances, and fraud protections. Netspend has aggressively fought this rule, projecting that it stands to lose a substantial portion of the $80-85 million it collects annually in overdraft and other fees. And unfortunately, some members of Congress are standing by Netspend’s side, including Representative Luke Messer and Representative Trey Hollingsworth, who have both signed on as sponsors of a resolution that would block these common-sense protections.
What will happen with the Department of Labor’s conflict of interest rule (or for short, the fiduciary rule)? This rule holds retirement investment advisors to the fiduciary rather than suitability standard, meaning that they have to act in the best interests of their clients when providing investment advice. As the Institute for Working Families argues, this is an important safeguard for Hoosiers who reach this step in the economic security pathway, as more and more retirement savings plans are defined contribution plans, which Hoosiers must manage on their own. Those who turn to a financial advisor for help should feel confident that the advisor’s suggestions are in their best interests. President Trump has delayed implementation of the rule – set to go into effect this month – in order to review it further.
What will happen to the Consumer Financial Protection Bureau (CFPB)? This watchdog agency guards Americans against unfair, deceptive and abusive practices (UDAP) in the financial sector. This recent Indiana A&O Network press release sheds light on just one of the recent actions the CFPB took to return hard-earned dollars to Hoosier consumers when a financial services company deceived them. Unfortunately, the recently-reintroduced CHOICE Act (dubbed CHOICE 2.0) would strip the CFPB of UDAP authority, allow the director to be removed at will, and turn the Bureau into an enforcement agency only with no rule-making or market study capabilities. That spells bad news for the vast majority of Americans hoping for stronger regulation of the payday lending industry and for continued consumer protection in general.
In early May, co-leads of the Indiana A&O Network policy committee will bring this letter to Washington, D.C. and look for answers to the questions listed above and others. Be sure to sign on now to make your voice heard so that the Indiana congressional delegation clears the path for Hoosiers to build assets rather than throwing more obstacles in our way.